Confident Draghi lifts euro to day's highs; yields dip

LONDON (Reuters) - The euro held at the day’s highs on Thursday after ECB President Mario Draghi presented a relatively confident outlook for the euro zone economy, contrary to some expectations that he would take a more cautious stance after recent weak data.

After briefly falling to its lowest since mid-January at $1.2145 after the ECB’s decision to keep policy unchanged, the single currency rebounded and was trading up 0.3 percent at the day’s highs of $1.2210 after Draghi played down concern over recent softness in data.

“If anything, he is a tad more hawkish than forecasts and he does not strike as being particularly concerned with the level of the euro either,” said Neil Jones, head of hedge fund sales at Mizuho Bank Ltd in London.

Despite the euro’s bounce on Thursday, the single currency has trimmed its gains for the year to be up only 1.5 percent against the dollar compared to more than 4 percent since the start of 2018 due to a resurgent dollar and tepid European data.

But the currency's gains EUR=EBS were largely marginal with core European bond yields dipping after Draghi acknowledged that measures of underlying inflation remained subdued.

“The main takeaway is that nothing has changed in the ECB’s policy stance and they remain on course to taper later in the year,” said Marchel Alexandrovich, European financial economist at Jefferies.